Multi-year loans: difference between direct and guaranteed

You will certainly have heard of the INPDAP long-term loans, but you can’t find any recent news: a problem common to all those who have been interested in these funds in recent years for public employees and retired former employees of the State. This difficulty arises from the fact that the INPDAP, the institute that managed social security and credit services for public employees and pensioners, was absorbed by the INPS, the National Social Security Institute, which today provides this kind of funding. Former INPDAP long-term loans are therefore a form of credit granted by the INPS, which provides loans to be spread over several years.

Today there are two forms of multi-year INPS loans , as envisaged in the past also by the INPDAP regulation. The first category is the direct management multi-year loans , addressed to all those enrolled in the Unit for credit and social services, also known as the Credit Fund. Furthermore, those who request it must have at least 4 years of seniority for retirement and 4 years of contributions to the Fund, as well as a permanent contract.

The loan lasts 5 years or 10 years and works with the mechanism of the assignment of the fifth: the reimbursement cannot exceed a fifth of salary or monthly pension and is made by debiting the current account. The nominal interest rate is equal to 3.5% per annum, to which must be added an administration fee of 0.5% and a contribution to the risk provision.

Then there are the guaranteed multi-year loans


Which is expressly addressed to those who benefited from the former INPDAP management: one could say that they are still long-term INPDAP loans. These loans, as per the INPDAP regulation, are provided by financial companies affiliated with the INPS: once again, those registered with the Unit Management Credit Fund can request them and the reimbursement takes place through the mechanism of the salary assignment.

Unlike direct loans, guaranteed long-term loans require the bank to set a variable rate

Unlike direct loans, guaranteed long-term loans require the bank to set a variable rate

The contributions to be paid to INPS are also increasing: in addition to administration costs of 0.5%, a compensatory premium for 1.5% default risk for 5-year loans and the 3% or for those 10 years. The INPDAP long-term loans therefore differ from the small INPDAP loan for the amount obtainable on loan and the longest repayment period.